Nuclear power startup Oklo has signed a major deal with data center operator Switch, but there are plenty of caveats.
The new contract will see Oklo build enough small modular reactors (SMRs) to generate 12 gigawatts of power for Switch's data center by 2044. The data center currently serves a wide range of companies including Google, Nvidia, Tesla, PayPal, and JP Morgan Chase. others. Oklo will build and operate power plants and sell power to data center customers through Switch.
The nuclear power startup backed by Sam Altman has yet to receive approval from the Nuclear Regulatory Commission after its previous application was rejected in 2022. Furthermore, this agreement is non-binding.
Altman is chairman of Oklo's board and invested in the company's seed round in 2015 after it emerged from Y Combinator. In May of this year, Oklo completed a reverse merger with AltC, a blank check company owned by Altman. The company's stock price briefly fell shortly after the merger closed, but has since rebounded on optimism that the company will become a major energy provider for power-hungry data centers.
Still, there are many hurdles. Securing NRC approval will largely depend on Oklo's ability to do so. That would require the company to deliver dozens to hundreds of SMR power plants, with the first generating 15 megawatts of electricity, increasing to 50 to 100 megawatts later.
The company hopes to have its first reactor online in 2027, but the NRC approval process is likely to be lengthy. Oklo's previous application was denied nearly two years after it was first filed. This schedule does not include document preparation on Oklo's side. The company plans to resubmit a new application in 2025, hoping new legislation that takes effect next year will speed up the process.
Even if Oklo manages to get approval and meet internal deadlines, it will face stiff competition from other nuclear startups in addition to renewable energy projects. One of Oklo's competitors, Kairos, has already received NRC approval and currently has a deal with Google to power its data centers.
But perhaps the fiercest competition will come in renewable power and grid-scale battery storage, both of which continue to fall in price. Google announced last week that it is helping anchor $20 billion worth of renewable power deals for solar, wind, and battery storage. The first phase of the project is expected to be operational by 2026.